Laid off Circuit City workers will get paid

Circuit City Stores Inc. employees laid off last month will continue to receive a paycheck and benefits.

Despite objections from a creditors committee, a federal bankruptcy court judge in Richmond approved a motion this morning allowing Circuit City to continue paying nearly 600 employees who were laid off from the corporate headquarters on Nov. 7.

Circuit City had received initial court approval last month to pay the workers through January. Today’s ruling makes that decision final.

Henrico County-based Circuit City argued that it benefited the retailer to maintain goodwill among current and former employees and the community as it tries to restructure its operations and finances.

After the ruling, James A. Marcum, the chain’s acting president and chief executive, said he was extremely pleased by the decision.

“These people gave their entire livelihoods to this company,” he said.

He said the ruling helps the nearly 30,000 employees still with the chain know how committed “we are to returning this company to what it once was.”

Circuit City filed for Chapter 11 protection Nov. 10.

The committee of unsecured creditors had argued that the $8 million to $10 million in future salary and benefits, including health-insurance payments, should be used to operate the company. The employees had received paychecks since being laid off. (Richmond Times-Dispatch)